Google: we're not to blame for newspapers' plight

 

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By Reuters

Posted on 4 Dec 2009 at 09:20

Google has spoken out against accusations that it's harming the newspaper business, claiming publishers do better out of Google News that it does.

"With dwindling revenue and diminished resources, frustrated newspaper executives are looking for someone to blame," Google chief executive Eric Schmidt wrote in an opinion piece in the Wall Street Journal.

"Much of their anger is currently directed at Google, whom many executives view as getting all the benefit from the business relationship without giving much in return," he said. "The facts, I believe, suggest otherwise."

Revenue from ads that appear alongside news articles on Google's search engine represent a "tiny fraction" of the company's overall revenue, Schmidt said.

With dwindling revenue and diminished resources, frustrated newspaper executives are looking for someone to blame

Developing new technology that makes it easier to reach readers and keeps readers engaged longer will be important for publishers, he said.

"We also acknowledge that it has been difficult for newspapers to make money from their online content," Schimdt wrote. "But just as there is no single cause of the industry's current problems, there is no single solution."

Schmidt envisioned a future in 2015 when consumers can flip through the pages of digital newspapers as quickly and effortlessly as with today's broadsheets. He predicted that consumers would receive some articles through paid subscriptions, while free previews of other articles might entice a consumer to pay "a few pennies" for access.

Advertisements, specially targeted to individual readers, would subsidise other freely available articles, he forecast.

Schmidt's comments come as news publishers adopt an increasingly antagonistic tone toward Google and other search engines. Last month, News Corp chief Rupert Murdoch threatened to block Google's search engine from accessing his newspapers' content.

Google subsequently announced a change to its technology that would allow publishers that charge subscription fees for online editions, such as News Corp's Wall Street Journal, to limit the number of times web surfers can access free versions of articles through Google searches.

In the past, Schmidt has suggested that publishers of general news would find it difficult to charge for their content on the web.

In a video conference with British broadcast executives in September, he said providers of niche content, like business news, might be able to charge for content. But the glut of general news freely available would make it challenging for mainstream publishers to justify putting paywalls around their content, he said.